PROF 5 - REVIEWER

PROF 5 INVESTMENT AND PORTFOLIO MGT. MIDTERM EXAM POINTERS TO REVIEW:

  • Foreign Exchange (Forex): is the conversion of a country's currency into another. In a free economy, currency is valued according to supply and demand.

  • Stocks: Ownership shares in a company. When you own stock, you own a piece of the company. Are a type of security that gives stockholders a share of ownership in a company Stocks also are called “equities.”

  • Cash: Physical currency (like coins and banknotes) and money in a bank account that can be quickly accessed. Money in coins or notes, as distinct from checks, money orders, or credit.

  • Bonds: is loan from an investor to a borrower such as a company or government. The borrower uses the money to fund its operations, and the investor receives interest on the investment. The market value of a bond can change over time.

  • Money Market: is an organized exchange market where participants can lend and borrow short-term, high-quality debt securities with average maturities of one year or less.

  • Capital Market: A financial market for buying and selling long-term securities like stocks and bonds. Are financial markets that bring buyers and sellers together to trade stocks, bonds, currencies, and other financial assets. Capital markets include the stock market and the bond market. They help people with ideas become entrepreneurs and help small businesses grow into big companies.

  • Direct Investing: Putting money directly into an investment, such as buying stocks or real estate.

  • Indirect Investing: Investing through intermediaries like mutual funds or exchange-traded funds (ETFs) rather than directly in individual assets. Refers to buying and selling the shares of intermediaries that hold a portfolio of securities

  • Hybrid Financial Security: is a single financial security that combines two or more different financial instruments. Hybrid securities, often referred to as "hybrids," generally combine both debt and equity characteristics. The most common type of hybrid security is a convertible bond that has features of an ordinary bond but is heavily influenced by the price movements of the stock into which it is convertible.

  • Investment Environment: refers to the economic, political, and social conditions that affect the investment market and the performance of financial instruments. Safety, income, and capital gains are the big three objectives of investing.